The start of this week was not the best possible for crude oil, since the price fell as low as 35.95 dollars a barrel on March 15th. However, the bulls managed to regroup and take the commodity to new highs near 39.63 so far. Some might explain oil’s price swings with the OPEC supply freeze negotiations. Others may add that the reports about the inventories, imports and exports caused the market to move in this particular way. But all the post-factum explanations are a bit useless. In our opinion, traders are far more interested in whether the development in the price of crude oil could have been predicted. Our answer is YES and we can prove it with the chart below.(some of the marks have been removed for this article)
Our premium clients received this chart on Monday, March 14th. As visible, the Elliott Wave Principle suggested we should expect a decline to around 36.00, before the bulls return to take oil to a new high. The relative strength index also helped us prepare for the weakness at the start of the week, by showing a bearish divergence between the last two swing highs. Now let’s see an updated chart, which will show us how crude oil has been developing during the last four days.
It turns out everything has been going according to plan. This is an excellent example of the fact, that the Wave principle can help you predict not only just one single, but two consecutive price moves in the opposite directions, without caring about all the explanations afterwards. That is one of the many reasons this forecasting method is our favorite. And we believe it deserves your trust too.
What to expect from now on? What is the bigger picture saying? Is crude oil going to continue even higher or the resistance near 39.60 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.